[Code of Federal Regulations]
[Title 49, Volume 4]
[Revised as of October 1, 2003]
[CITE: 49CFR266]
[Page 727-742]
TITLE 49--TRANSPORTATION
CHAPTER II--FEDERAL RAILROAD ADMINISTRATION, DEPARTMENT OF TRANSPORTATION
PART 266--ASSISTANCE TO STATES FOR LOCAL RAIL SERVICE UNDER SECTION 5 OF THE DEPARTMENT OF TRANSPORTATION ACT--Table of Contents
Sec.
266.1 Definitions.
266.3 Rail Service Assistance Program.
266.5 State eligibility.
266.7 Project eligibility.
266.9 Federal/State share.
266.11 Allowable costs.
266.13 Distribution of funds.
266.15 Requirements for State Rail Plan.
266.17 Applications.
266.19 Environmental impact.
266.21 Grant agreement and disbursement.
266.23 Record, audit, and examination.
266.25 Waivers and modifications.
Authority: Sec. 5 of the Department of Transportation Act (49 U.S.C.
1654), as amended by the Local Rail Service Assistance Act of 1978, Pub.
L. 95-607, 92 Stat. 3059.
Source: 44 FR 51129, Aug. 30, 1979, unless otherwise noted.
Sec. 266.1 Definitions.
As used in this part:
Acquisition assistance means funds granted to a State under section
5(f)(2) of the Department of Transportation Act (49 U.S.C. 1654(f)(2))
to cover the cost of acquiring by purchase, lease, or in such other
manner as the State considers appropriate, a line of railroad or other
rail properties, or any interest therein for existing or future rail
freight service.
Act means the Department of Transportation Act (49 U.S.C. 1650 et
seq.).
Administrator means the Administrator of the Federal Railroad
Administration or the Administrator's delegate.
Cash means an outlay of funds.
Commission means the Interstate Commerce Commission or any successor
Federal agency to the relevant activity.
Common carrier means a person providing railroad transportation for
compensation who is subject to the jurisdiction of the Commission under
subchapter I of chapter 105 of title 49 of the U.S.C.
Designated State Agency means the State agency designated under
section 5(j)(2) of the Act (49 U.S.C. 1654(j)(2)).
Entitlement means the amount of assistance which a State is eligible
to receive annually under section 5(h) of the Act (49 U.S.C. 1654(h)).
Equipment means rolling stock of the kind generally used by American
railroads in revenue freight service.
Facilities means track, ties, roadbed and related structures
including terminals, team tracks and appurtenances, bridges and tunnels,
and other structures used or usable for rail service operations.
FRA means the Federal Railroad Administration.
Federal Share means the contribution by the Administrator under
section 5(g) of the Act (49 U.S.C. 1654(g)) to a State's rail service
assistance program.
Final System Plan means the plan approved by the Congress under
section 208 of the Regional Rail Reorganization Act of 1973 (45 U.S.C.
718).
Gross ton miles per mile means the combined weight of locomotives
and all trailing cars and their contents used in revenue freight trains
multiplied by the number of route miles traveled and divided by the
number of route miles of the line.
Line means a line of railroad.
Maintenance means inspection and light repairs, emergency repairs
and a planned program of periodic maintenance which is necessary to keep
a line at its existing condition or to comply with FRA Class 1 Safety
Standards.
Planning assistance means funds granted to a State under section
5(i) of the Act (49 U.S.C. 1654(i)) to meet the cost of establishing
(including developing a planning application), implementing, revising,
and updating the State Rail Plan required by section 5(j) of the Act (49
U.S.C. 1654(j)).
Planning Work Program means that portion of a State's planning
application which outlines the State's plan for establishing,
implementing, revising, or updating a State Rail Plan which meets the
requirements of section 5(i) of the Act, (49 U.S.C. 1654(i)).
Program operation assistance means funds granted to a State to cover
those administrative costs allowable under Federal Management Circular
74-4.
Rail Act means the Regional Rail Reorganization Act of 1973 (45
U.S.C. 701 et seq.).
[[Page 728]]
Rail banking means the acquisition of an interest in a rail right-
of-way sufficient to ensure its preservation for future rail freight
service.
Rail facility construction assistance means funds granted to a State
under section 5(f)(5) of the Act (49 U.S.C. 1654(f)(5)) to cover the
cost of constructing rail or rail related facilities (including new
connections between two or more existing lines, intermodal freight
terminals, sidings, and relocation of existing lines) for the purpose of
improving the quality and efficiency of rail freight service.
Rail service continuation assistance means funds granted to a State
under section 5(f)(1) of the Act (49 U.S.C. 1654(f)(1)) to cover rail
service continuation payments for the difference between the revenue
attributable to a line of railroad and the avoidable costs of providing
rail service on that line, together with a reasonable return on the
value of the line and other rail properties related to that line, all as
determined in accordance with 49 CFR part 1121 with the following
exceptions:
(1) Where service was eligible to be subsidized under section
402(c)(2) (A) and (B) of the Rail Act, rail service continuation
assistance means funds for payments determined in accordance with 49 CFR
part 1125; and
(2) Where service was eligible to be subsidized under section
402(c)(2)(C) of the Rail Act, rail service continuation assistance means
funds for payments calculated, to the greatest extent possible, in a
manner consistent with 49 CFR part 1121.
Rehabilitation or improvement assistance means funds granted to a
State under section 5(f)(3) of the Act (49 U.S.C. 1654(f)(3)) to cover
the cost of replacing or upgrading, to the extent necessary to permit
adequate and efficient rail freight service, facilities needed to
provide service on a line.
Relocation costs means actual expenses directly incurred in moving
shippers from a line to a new location.
State means any State or the District of Columbia in which a common
carrier maintains any line.
State Rail Plan means the current plan, including all updates,
revisions, and amendments required by section 5(j)(1) of the Act (49
U.S.C. 1654(j)(1)).
Substitute service assistance means funds granted to a State under
section 5(f)(4) of the Act (49 U.S.C. 1654(f)(4)) to cover the cost of
reducing the costs of lost rail service in a manner less expensive than
continuing rail service and includes (but is not limited to) the
acquisition, construction, or improvement of facilities for the
provision of substitute freight transportation services and relocation
costs.
Sec. 266.3 Rail Service Assistance Program.
(a) Scope of the program. The Rail Service Assistance Program
includes:
(1) Rail service continuation assistance;
(2) Acquisition assistance;
(3) Rehabilitation or improvement assistance;
(4) Substitute service assistance;
(5) Rail facility construction assistance;
(6) Planning assistance; and
(7) Program operations assistance.
(b) Special limitations on planning assistance and program operation
assistance. (1) A State is eligible to receive up to $100,000, or 5
percent of its entitlement, whichever is greater, as planning
assistance; and
(2) A State is eligible to receive up to 5 percent of the total
amount of funds granted to it each fiscal year under paragraphs (a)(1)
to (5) of this section as program operation assistance.
Sec. 266.5 State eligibility.
(a) General eligibility requirements under the rail service
assistance program. A State is eligible for assistance if:
(1) The State has certified pursuant to section 5(j)(4) of the Act
that it has or will adopt and maintain adequate procedures for financial
control, accounting and performance evaluation in order to assure proper
use of Federal funds;
(2) For purpose of establishing a State Rail Plan, the State has
submitted, in accordance with Sec. 266.17(e) of this part, a planning
application; and
(3) For any other assistance,
(i) The State has established an adequate plan for rail services in
the State which (A) meets the requirements of Sec. 266.15 of this part;
(B) is part of an
[[Page 729]]
overall planning process for all transportation services in the State;
(C) includes a suitable procedure for updating, revising, and amending
such plan; and (D) as updated, revised, or amended has been approved by
the Administrator;
(ii) Such State Rail Plan (A) is administered or coordinated by a
designated State agency; (B) provides for the equitable distribution of
resources; and (C) includes a methodology for determining the ratio of
benefits to costs of projects for which acquisition assistance,
rehabilitation or improvement assistance, substitute service assistance,
and rail facility construction assistance is sought;
(iii) The State agency:
(A) Has authority and administrative jurisdiction to develop,
promote, supervise, and support safe, adequate, and efficient rail
transportation services;
(B) Employs or will employ, directly or indirectly, sufficient
trained and qualified personnel;
(C) Maintains or will maintain adequate programs of investigation,
research, promotion, and development with provision for public
participation; and
(D) Is designated and directed solely or in cooperation with other
State agencies to take all practicable steps to improve transportation
safety and to reduce transportation-related energy utilization and
pollution; and
(iv) The State undertakes to immediately notify the Administrator of
any changes in conditions which might affect its compliance with this
section.
Sec. 266.7 Project eligibility.
(a) Rail service continuation assistance, acquisition assistance and
substitute service assistance. A project is eligible for assistance
under Sec. 266.3(a) (1), (2), and (4) of this part, respectively, if:
(1) The Commission pursuant to 49 U.S.C. 10903 has found since
February 5, 1976, that the public convenience and necessity permit the
abandonment and discontinuance of rail service on the line related to
the project, except that any such line or related project eligible prior
to October 1, 1978, is eligible only until September 30, 1981 and any
such line eligible for rail service continuation assistance shall
receive such assistance for no more than 36 months after October 1,
1978;
(2) The line related to the project was eligible for assistance
under section 402 of the Rail Act (45 U.S.C. 762), except that any such
line or related project is eligible only until September 30, 1981; or
(3) For purposes of acquisition assistance, the line related to the
project is listed for possible inclusion in a rail bank in Part III,
Section C of the Final System Plan.
(b) Rehabilitation and improvement assistance and rail facility
construction assistance. A project is eligible for assistance under
Sec. 266.3(a) (3) and (5) of this part, respectively, if:
(1)(i) The Commission has not made a finding that the public
convenience and necessity would require or permit abandonment or
discontinuance of rail service on the line related to the project;
(ii) Any pending application for a certificate of abandonment or
discontinuance of rail service on the line related to the project is
withdrawn within a reasonable period (as determined by the
Administrator) following the execution of the grant agreement and before
Federal funds are disbursed for the project; and
(iii)(A) The line related to the project is certified by the
railroad as having carried three million gross ton miles per mile or
less during the prior year; or
(B) The line related to the project is certified by the railroad in
a written statement which identifies the name of the line, the State or
States in which it is located, its length, termini, and termini mile
posts as having carried between three and five million gross ton miles
per mile during the prior year, and the Administrator has determined
that the project is consistent with proposals made under the authority
of subsections 5 (a) through (e) of the Act (49 U.S.C. 1654 (a)-(e));
(2)(i) An application for a certificate of abandonment or
discontinuance of rail service on the line related to the project has
been filed with the Commission during the period February 5, 1976
through December 31, 1978, whether or not such application has been
granted; or
[[Page 730]]
(ii) During the period February 5, 1976, through December 31, 1978,
the Commission has found that the public convenience and necessity would
require or permit abandonment or discontinuance of rail service on the
line related to the project irrespective of when the application was
filed;
(3) The line related to the project is listed for possible inclusion
in a rail bank in Part III, Section C of the Final System Plan; or
(4) The line related to the project was eligible to be acquired
under section 402(c)(3) of the Rail Act (45 U.S.C. 762(c)(3)).
(c) Projects eligible under paragraphs (b)(2), (b)(3), and (b)(4),
of this section are eligible only until September 30, 1981. Projects
initially eligible under paragraph (b)(2) of this section, may
subsequently become eligible under paragraph (b)(1) of this section, if
the Commission issues a new certificate of public convenience and
necessity with respect to the line related to the project.
Sec. 266.9 Federal/State share.
(a) Federal share. The Federal share of allowable costs under the
Rail Service Assistance Program is 80 percent, with the exception that
the Federal share of payments to be covered by rail service continuation
assistance shall be 70 percent for any third twelve month period which
begins on or after October 1, 1980 that such assistance is provided.
(b) State share-general. The State share of allowable costs under
the Rail Service Assistance Program shall be provided either in cash or
through eligible in-kind benefits which would not otherwise have been
provided. When more than the required State share is provided during the
Federal fiscal year beginning October 1, 1978, or thereafter, the amount
in excess of the required State share may be carried forward to
subsequent fiscal years. The State share of allowable costs under the
Rail Service Assistance Program may not be satisfied directly or
indirectly by any Federal funds unless the funds are provided through a
Federal program which specifically authorizes the use of such funds to
satisfy the non-Federal share of a Federally subsidized program.
(c) In-kind benefits--(1) Eligible types of benefits and their
valuation. The following types of in-kind benefits are eligible when
they are provided for projects eligible under Sec. 266.7 of this part
(whether or not Federal assistance is requested for the projects) or
they are activities which would be eligible for planning and program
operation assistance. Eligible in-kind benefits are valued as follows:
(i) The value of forgiven taxes, such as those portions of gross
receipts or revenue taxes which are applicable to an approved project or
property taxes on project related property, shall be the amount which
would otherwise have been levied by the taxing authority. Forgiveness
may be through exemption or remission;
(ii) The value of trackage rights secured by a State for a common
carrier shall be the amount paid by railroads for comparable rights on
comparable rail freight properties;
(iii) The value of State salaries for State public employees working
in the State Rail Service Assistance Program, shall be consistent with
rates paid for similar work by state public employees working in
comparable state programs but shall not include overhead or general
administrative costs;
(iv) The value of donations by the State or by a third party on
behalf of the State of real property or tangible personal property of
the kind necessary for safe and efficient operation of rail freight
service, such as State or locally owned or leased buildings used in rail
freight operations or equipment or materials, shall be determined as
follows:
(A) The value of State tangible personal property shall be
established at the State's actual cost in accordance with Federal
Management Circular 74-4;
(B) The value of donated tangible personal property shall be
determined in accordance with Attachment F of Office of Management and
Budget Circular (OMB) A-102;
(C) The value of State real property shall be established at the
State's actual cost in accordance with Federal Management Circular 74-4,
if at least one independent appraisal based on the
[[Page 731]]
results of a title search was performed when the property was purchased
by the State, otherwise it shall be valued at the fair market value as
established by at least one independent appraisal based on the results
of a title search at the time the state proposes to make the property
available as in-kind benefit; and
(D) The value of donated real property shall be its fair market
value, at the time of donation to the State, as established by at least
one independent appraisal based on the results of a title search;
(2) Eligibility criteria. To be applied toward the State share, in-
kind benefits must:
(i) Be verifiable from the State's records;
(ii) Be necessary and reasonable for proper and efficient
accomplishment of the objectives of the Rail Service Assistance Program;
(iii) Be provided for in the approved grant budget; and
(iv) Be approved under paragraph (3) of this paragraph (c).
(v) The State shall submit such information as the Administrator may
request to verify the value of in-kind benefits.
(3) Request for approval. A request for approval of the in-kind
benefits are to be applied and shall include the following:
(i) Full name and principal business address of the contributor if
other than grantee;
(ii) Detailed documentation of the in-kind benefits including
identification of the kind of in-kind benefits to be provided as well as
their estimated value. When in-kind benefits are to be provided by a
third party, a copy of the executed agreement between the State and the
third party; and
(iii) Certification by the State that the contribution will be used
solely for the purposes documented.
Sec. 266.11 Allowable costs.
Allowable costs include only the following costs which are properly
allocable to the work performed: Planning and program operation costs
which are allowed under Federal Management Circular 74-4; and costs of
projects eligible under Sec. 266.7 of this part. All allowable costs
shall be authorized by a fully executed grant agreement. A State may
incur costs prior to the execution of a grant agreement only if the
Administrator, based on the State's demonstration of a compelling need
to incur costs prior to the execution of a grant agreement, has
authorized the costs in writing prior to their incurrence by the State.
Sec. 266.13 Distribution of funds.
(a) Formula. Funds appropriated for or reallocated in any fiscal
year (in this section refered to jointly as ``funds'') are to be
distributed to each State as follows:
(1) Two-thirds of the funds will be allocated in the ratio which a
State's rail mileage that, in accordance with 49 U.S.C. 10904(d), is
either potentially subject to abandonment or is to become the subject of
an application for a certificate of abandonment or discontinuance which
a carrier plans to submit, but has not yet submitted, bears to the total
such rail mileage in all the States;
(2) One-third of the funds will be allocated in the ratio which a
State's rail mileage for which the Commission has found within three
years prior to the first day of the fiscal year for which the funds are
being allocated that the public convenience and necessity permits the
abandonment, or the discontinuance, of rail service on such rail
mileage, bears to the total such rail mileage in all the States. Until
September 30, 1981, such rail mileage includes the rail mileage which
was eligible under the Rail Service Assistance Program pursuant to
section 402 of the Rail Act, and all rail mileage which, prior to
October 1, 1978, had been included for formula allocation purposes. The
Administrator will calculate rail mileage under this paragraph as of
October 1 of each year; and
(3) The above calculations will be adjusted if necessary so that no
State receives less than 1 percent of the funds appropriated for a
fiscal year.
(b) Reallocation. The Administrator will reallocate among the States
funds which have not been granted under an executed grant agreement by
the end of the fiscal year for which the funds were appropriated and
funds determined by
[[Page 732]]
a Federal audit to be in excess of allowable costs when they have not
been granted under an executed grant agreement by the end of the fiscal
year in which the Federal audit is made. Reallocated funds are
distributed in accordance with the allocation formula described in
paragraph (a) of this section.
(c) Interstate sharing of allocated funds. Where not in violation of
State law, two or more States, which are eligible to receive assistance
under the Rail Service Assistance Program pursuant to Sec. 266.5 of this
part may combine any portion of their entitlements for purposes of
conducting any eligible project of mutual benefit provided that they
enter into an agreement for this purpose.
Sec. 266.15 Requirements for State Rail Plan.
(a) State planning process. The State Rail Plan shall be based on a
comprehensive, coordinated and continuing planning process for all
transportation services within the State and shall be developed with an
opportunity for participation by persons interested in rail activity in
the State and adjacent States where appropriate. At a minimum, the State
shall hold a public hearing if, on the basis of reasonable public notice
appearing in the press, there is sufficient public interest to justify a
hearing. Public notice shall be given, in accordance with applicable
State law and practice concerning comparable matters, that a draft of
the State Rail Plan is available for public inspection at a reasonable
time in advance of the hearing. The State shall enable local and
regional governmental bodies to review and comment on appropriate
elements of the State Rail Plan. Provisions shall also be made for
updating, revising, and amending the State Rail Plan.
(b) Format of the State Rail Plan. Each item submitted in response
to a requirement of this section shall reference that requirement by
subsection, paragraph, and subparagraph.
(c) Contents of the State Rail Plan. Each State Rail Plan shall:
(1) Specify the objectives of the State's Rail Service Assistance
Program and explain how the implementation of the State Rail Plan will
accomplish these objectives and explain relevant data sources,
assumptions, analytical methodology, other legal constraints and special
problems or conditions which will aid the public in understanding the
State Rail Plan;
(2) Contain an illustration of the State's entire rail system on
suitable scale maps of the State highway system (such as a reduction of
the County Highway Planning Series of maps), designating with respect to
each line listed under subparagraph (3) of this subsection, including
all lines connecting to them:
(i) The operating carrier or carriers;
(ii) Freight traffic density, and
(iii) Location of passenger service.
These maps shall be accompanied by a written description of the service
provided on each line;
(3) Identify the following classes of rail service within the State:
(i) Lines in the State which are eligible for assistance under
Sec. 266.7 of this part other than those included in paragraph
(c)(3)(ii) of this section;
(ii) Lines in the State which a common carrier has identified on its
system diagram map submitted under 49 CFR 1121.20(b) (1) and (2) as
potentially subject to abandonment and lines which are anticipated to be
the subject of an abandonment or discontinuance application within three
years following the date of submission;
(iii) [Reserved]
(iv) Lines in the State for which abandonment or discontinuance
applications are pending;
(v) Lines in the State which are involved in the following kinds of
proposals that have been submitted to the Commission for approval or are
in the process of negotiation, to the extent that this information is
publicly available:
(A) Mergers;
(B) Consolidations;
(C) Reorganizations;
(D) Purchases by other common carriers; or
(E) Other unification and coordination projects.
(vi) Rail projects for which the State plans to request Federal
assistance or approval as in-kind benefits; and
[[Page 733]]
(vii) Rail projects for which a State provides or plans to provide
assistance from sources other than the Rail Service Assistance Program,
including the estimated cost of the projects;
(4) Establish and describe screening criteria to be used in
selecting the eligible lines which the State analyzes in detail,
identify these lines, and explain how the application of the screening
criteria resulted in their selection;
(5) Describe the State's methodology for determining the ratio of
benefits to the costs of proposed projects eligible under Sec. 266.7 of
this part (except projects to be funded with rail service continuation
assistance);
(6) Include, to the extent that the information is available to the
State, the following data for each line the State has selected to
analyze in detail:
(i) Annual freight tonnage and carloads segregated by commodity type
and indicating any seasonal traffic fluctuations and the number of
shippers and receivers on the line aggregated by type (e.g., grain
elevator, power plant, heavy manufacturing), including identification of
information which a shipper wishes the Administrator to consider
confidential to the extent permitted by law;
(ii) Revenues and costs of providing rail freight service on the
line;
(iii) Condition of the related rail facilities and equipment, and
for a line eligible under Sec. 266.7(b) of this part, a description of
the particular rail facilities involved in any project a State may be
considering on the line;
(iv) When the State is considering a line for rail service
continuation assistance, projections of freight traffic needs on the
line for at least the three succeeding calendar years and estimates of
the amount and type of equipment, the condition of the rail facilities,
and the level of service necessary to satisfy the projected traffic
needs as well as estimates of the revenue and costs of providing this
service; and
(v) When the State is considering a project eligible under
Sec. 266.7(b) of this part, the amount of funds expended for the
maintenance of the line and the kinds of work performed during the five
year period preceding its eligibility.
(vi) When the State is considering a line for rail banking, a
description of the line's future economic potential, such as the
existence of fossil fuel reserves or agricultural production likely to
be served;
(7) Describe the alternatives which the State will analyze in
applying the methodology described in paragraph (c)(5) of this section,
such as: Rail service continuation payments, rehabilitation or
improvement, acquisition, rail facility construction, potential for
moving freight by alternate modes, or abandonment or discontinuance of
rail freight service;
(8) Apply the methodology described in paragraph (c)(5) of this
section to each line the State has selected to analyze in detail;
(9) Specify the State's decision regarding the alternative selected
for each line the State has analyzed in detail and include the
following:
(i) An indication of whether Federal assistance will be requested or
other funds will be used to implement the alternative selected;
(ii) An identification of lines which may be affected by the
alternative selected;
(iii) An explanation of how the alternative selected contributes to
the accomplishment of the State's objectives as stated in paragraph
(c)(1) of this section; and
(iv) A statement of the projected future of the line after the
alternative selected is implemented and the line is no longer eligible
for rail service continuation assistance under Sec. 266.7(a) of this
part or after the payback period used in the State's benefit-cost
analysis, whichever is appropriate;
(10) Describe the planning process participation of local and
regional governmental bodies, the railroads, railroad labor, rail
service users, and the public in general;
(11) Describe the overall planning process for all transportation
services in the State; and
(11A) Indicate how the overall planning process in the State
addresses the need to improve national energy efficiency, reduce the
national use of petroleum and natural gas, and increase the national use
of coal.
[[Page 734]]
(12) Include a program of projects which identifies the projects for
which the State expects to submit applications and the anticipated
submission date. The program shall group the proposed projects in the
order they comply with the State's criteria and goals for assistance,
and shall:
(i) Identify the type of project (i.e., rail service continuation
payments, acquisition, rehabilitation or improvement, rail facility
construction, or substitute service), its location, and duration; and
(ii) Include the anticipated amount of funds to be requested for
each project:
(d) Updates, revisions, and amendments of the State Rail Plan--(1)
General. As provided for in paragraph (e) of this section, State Rail
Plans shall be updated at least on an annual basis but may be revised
more frequently at the discretion of the State in accordance with its
program needs. Such updates shall be subject to the same review, public
participation and approval procedures by the State and FRA as the
original State Rail Plan.
(2) Contents. Annual updates shall include the following:
(i) A response to unanswered FRA comments on previously submitted
updates, revisions, amendments, or the original State Rail Plan;
(ii) An update of information in previous submittals which is no
longer accurate as a result of plan implementation, action by a
governmental entity or railroad, or changed conditions;
(iii) For lines receiving rail service continuation assistance,
inclusion of revenue and cost information from the past year's operating
experience and a reevaluation of service based on these new data;
(iv) Updating of the maps and descriptions required under paragraph
(c)(2) of this section;
(v) Analysis of any new projects developed by the State in
accordance with paragraphs (c)(4), (5) and (6) of this section;
(vi) Changes in agency responsibilities and authority including
ability to provide the non-Federal share; and
(vii) Revisions in the State's policies, objectives or long-range
expectations.
(e) Adoption and submission of State Rail Plan and annual updates.
An original and five copies of the State Rail Plan, and any amendments,
revisions, or updates shall be submitted to FRA for review and approval
with a certification by the Governor, or by the Governor's delegate,
that the submission constitutes the State Rail Plan established by the
State as provided in section 5(j) of the Act. The State Rail plan, and
all amendments, revisions, and updates shall be submitted to the FRA
through the appropriate Federal Highway Division Office. A current list
of mailing addresses of the above offices will be provided by FRA to
each State.
(f) Review of the State Rail Plan and Updates. The State Rail Plan
and all amendments, revisions, and updates shall analyze in accordance
with this section all projects for which the State anticipates
requesting rail service assistance, other than planning assistance,
during the fiscal year. In accordance with Sec. 266.17(b) of this part,
a project for which funds are requested must have been addressed in a
previously approved State Rail Plan or update. If the Administrator
determines that the State Rail Plan or update is not in accordance with
this part, the Administrator will notify the State in writing setting
forth the Administrator's reasons for such a determination.
[44 FR 51129, Aug. 30, 1979, as amended at 45 FR 58038, Aug. 29, 1980;
48 FR 29274, June 24, 1983]
Sec. 266.17 Applications.
(a) General. (1) Applications for planning assistance shall comply
with paragraphs (b), (c) and (e) of this section.
(2) Applications for rail service continuation assistance shall
comply with paragraphs (b), (c), (d) and (f) of this section.
(3) Applications for acquisition assistance shall comply with
paragraphs (b), (c), (d) and (g) of this section.
(4) Applications for rehabilitation or improvement assistance and
rail facility construction assistance shall comply with paragraphs (b),
(c), (d) and (h) of this section.
[[Page 735]]
(5) Applications for substitute service assistance shall comply with
paragraphs (b), (c), (d) and (i) of this section.
(b) Submission. (1) Applications shall be submitted by the
designated State agency using the standard forms contained in Attachment
M of Office of Management and Budget Circular No. A-102 (``OMB Circular
A-102''). Each item submitted in response to a requirement of this
section shall reference that requirement by subsection, paragraph, and
subparagraph. Each application shall be consistent with the current
State Rail Plan and analyzed in it.
(2) A State may apply for planning assistance to cover prospective
costs at any time during the planning process.
(3) Exhibits previously filed with the Administrator need not be
refiled unless the prior filing has been rendered obsolete by changed
circumstances. Such prior filing shall be appropriately referenced by
source, location of data and date of submittal.
(c) Contents. Each application shall include:
(1) Full name and principal business address of the applicant;
(2) Name, title, address and phone number of the person to whom
correspondence regarding the application should be addressed;
(3) Budget estimates for the total amount of assistance required for
projects or planning;
(4) Applicant's proposed means of furnishing its share of the total
costs of the projects, as well as copies of executed agreements between
the agency and any third party which may be providing the non-Federal
share or a portion thereof;
(5) Assurance by the chief executive officer of the applicant that
the Federal funds provided under the Act will be used solely for the
purpose for which the assistance will be provided and in conformity with
limitations on expenditures under the Act and applicable regulations;
(6) Evidence that the applicant has established in accordance with
Attachment G of OMB Circular A-102, adequate procedures for financial
control, accounting and performance evaluation in order to assure proper
use of the Federal funds;
(7) Assurance by applicant's chief executive officer that the timing
of all advances by the applicant will comply with the Department of
Treasury advance financing regulations (31 CFR part 205);
(8) Statement as to whether the applicant prefers to receive
disbursement of Federal funds by advance payment or reimbursement;
(9) Opinion of applicant's legal counsel showing that counsel is
familiar with the corporate or other organizational powers of the
applicant, that the applicant is authorized to make the application,
that the applicant is eligible to participate in the Rail Service
Assistance Program in accordance with the provisions of the Act and this
part, and that the applicant has the requisite authority to carry out
actions proposed in the application and to assume the responsibilities
and obligations created thereby;
(10) Assurances that the applicant will comply with and that the
program will be conducted in accordance with the following Federal laws,
policies, regulations and pertinent directives:
(i) Title VI of the Civil Rights Act of 1964, 42 U.S.C. 2000d et
seq., and 49 CFR part 21;
(ii) Section 905 of the Railroad Revitalization and Regulatory
Reform Act of 1976, 45 U.S.C. 803, and 49 CFR part 265;
(iii) The Rehabilitation Act of 1973, 29 U.S.C. 794 and 49 CFR part
27 (44 FR 31442, May 31, 1979) relating to non-discrimination on the
basis of handicap; and
(iv) The State and Local Fiscal Assistance Act of 1972, 31 U.S.C.
1221 et seq. and 31 CFR part 51; and
(11) When two or more States desire to combine their entitlements or
any portion of them for the purpose of funding a project, certification
of the Governor or the Governor's delegate of each State involved that
it is a party to an interstate agreement as required under section
5(h)(4) of the Act (49 U.S.C. 1654(h)(4)). Such certification shall
include the amount of money to be used from each State's entitlement and
which State is to enter into a grant for the project.
[[Page 736]]
(d) Additional contents. In addition to meeting the requirements of
paragraphs (b) and (c) of this section each application except when
planning assistance is requested, shall include evidence that the agency
submitting the application has the statutory authority and
administrative jurisdiction to develop, promote, supervise and support
safe, adequate, and efficient rail services; that it employs or will
employ, directly or indirectly, sufficient trained and qualified
personnel; that it maintains or will maintain adequate programs of
investigation, research, promotion, and development with provision for
public participation; and that it is designated and directed solely, or
in cooperation with other State agencies, to take all practicable steps
to improve transportation safety and to reduce transportation related
energy utilization and pollution.
(e) Planning assistance. In addition to meeting the requirements of
paragraphs (b) and (c) of this section, each application for planning
assistance shall include a Planning Work Program which, together with
such other information the State may choose to submit, demonstrates to
the satisfaction of the Administrator that the State's proposed use of
planning assistance will produce a State Rail Plan, or an update,
amendment or revision which meets the requirements of Sec. 266.15 of
this part. The Planning Work Program shall include the following
information:
(1) An explanation of how the State Rail Plan will be related to the
overall planning process for transportation within the State. This
explanation shall concentrate on the expectations of the State for the
future of local rail freight services and consider such factors as
likelihood of profitability of existing rail lines, necessity of rail
service continuation payments, State acquisition of rail lines, use of
alternate modes of transportaion in lieu of rail freight service, and
other long-term alternatives;
(2) A description of the methods by which the State will involve
local and regional governmental bodies and the public generally in its
rail planning process, including its methods of providing for equitable
distribution of resources;
(3) An identification of the data to be obtained on the rail network
and rail services in the State, the sources of this data, and the
methodology to be employed in the collection of the data;
(4) A description of the method by which the State will develop the
State Rail Plan, including a brief description of discrete tasks or
activities to be accomplished; and
(5) A list of the individuals responsible for the planning, a work
schedule and a budget.
(f) Rail service continuation assistance. In addition to meeting the
requirements of paragraphs (b), (c), and (d) of this section, each
application for rail service continuation assistance shall include the
following:
(1) The amount of the estimated rail service continuation payment
for each line; and
(2) A description of the arrangements which the applicant has made
for operation of the rail services to be subsidized including copies of
the proposed operating agreements, leases, or other compensation
agreements under which service is to be provided, and the results of the
application's preaward audit of proposed operators and equipment leasing
companies if the equipment to be used in providing the rail service is
to be leased by the proposed operator.
(g) Acquisition assistance. In addition to meeting the requirements
of paragraphs (b), (c), and (d) of this section, each application for
acquisition assistance shall include the following:
(1) Copies of the results of a title search, and the basis for the
proposed acquisition price including two independent valuation
appraisals by qualified appraisers. Such appraisals shall be performed
in accordance with the ``Uniform Appraisal Standards for Federal Land
Acquisition'' proposed by the Interagency Land Acquisition Conference
and shall be based on the results of a title search and comparable sales
and shall take cognizance of all easements, encumbrances and
restrictions that may affect the value of the property. Such appraisals
shall be reviewed by a State Review appraiser to establish just
compensation;
[[Page 737]]
(2) Written assurance that the acquisition is being undertaken in
accordance with 49 CFR 25.253, 25.255, 25.257, and 25.259 to the
greatest extent practicable under State law and fully in compliance with
49 CFR 25.261(a) and 25.263;
(3) Written assurance that the owner of the property to be acquired
has been advised of the requirements of 49 CFR 25.259 or will be advised
of such requirements prior to the consummation of the acquisition;
(4) A description of the necessary steps, and timing for completion
of the acquisition;
(5) When rail service is to be immediately provided over the line, a
description of the arrangements which the applicant has made for
operation of the rail service, including copies of the proposed
operating agreements, leases, and other compensation agreements under
which the service is to be provided, and a description of the means by
which the State will continue rail service on the property to be
acquired once assistance under the Act is terminated;
(6) For applications regarding rail banking, evidence that the
properties for which assistance is requested have potential for rail
freight service such as plans for agricultural development or existence
of fossil fuel reserves, the State's anticipated timetable for returning
the line to service, and its proposed use of the property while it is
out of service including its maintenance plans; and
(7) Evidence that the anticipated benefits and costs of the proposed
acquisition have been analyzed in accordance with the methodology
established by the State under Sec. 266.15(c)(5) of this part.
(h) Rehabilitation or improvement assistance and rail facility
construction assistance. (1) In addition to meeting the requirements of
paragraphs (b), (c), and (d) of this section, each application for
rehabilitation or improvement assistance and rail facility construction
assistance shall include the following:
(i) A detailed estimate of the materials and labor required to
complete the work, the total estimated costs of the work, the estimated
numbers and kinds of ties and other material, the milepost termini
involved, and a schedule for completion of the work;
(ii) Evidence that the anticipated benefits and costs of the
proposed acquisition have been analyzed in accordance with the
methodology established by the State under Sec. 266.15(c)(5) of this
part;
(iii) When rehabilitation assistance is requested--
(A) A copy of the document by which funds will be granted or loaned
(at an interest rate determined by the State) to the owner of the rail
properties or the operator of the rail service related to the project;
and
(B) An assurance by the chief executive officer of the applicant
that:
(1) Repaid loan funds and interest accumulated with respect to such
funds will not be loaned or granted without the prior written approval
of the Administrator;
(2) The Federal share of repaid loan funds will be placed in an
interest-bearing account or with the prior written approval of the
Administrator will be deposited by the borrower, for the benefit and use
of the State, in a bank which has been designated by the Secretary of
Treasury in accordance with 12 U.S.C. 265; and
(3) If the rehabilitated or improved facilities are not used for
rail freight service during the useful life of the improvement the
Federal share of the fair market value of the improvement or facility
will be placed in an interest-bearing account or with the prior written
approval of the Administrator will be deposited by the owner of the rail
properties, for the benefit and use of the State, in a bank which has
been designated by the Secretary of the Treasury in accordance with 12
U.S.C. 265;
(iv) An assurance by chief executive officer of the applicant that
rehabilitated or improved facilities or newly constructed facilities
will be maintained to prevent deterioration below the speed at which the
line could be operated upon completion of the project during the period
of time established as the payback period in the benefit-cost analysis
of the project;
(2) In addition to meeting the requirements of paragraphs (b), (c),
and
[[Page 738]]
(d) and (h)(1) of this section, each application for a project eligible
under Sec. 266.7(b)(2)(i) (if the Commission has made a finding granting
the application for abandonment and discontinuance) (ii), (3) or (4)
shall also include the following:
(i) An indication of which of the following methods will be used to
complete the work, including proposed contracts unless the work will be
performed under method (A):
(A) On an actual cost basis by the operator or the applicant;
(B) By contracting for the work in accordance with Attachment O to
OMB Circular A-102; or
(C) Under an existing continuing contract between the operator and
another firm provided that the applicant can demonstrate the the costs
are comparable to those under paragraph (h)(2)(i) (A) or (B) of this
section; and
(ii) A description of the plans for inspection of the work including
identification and qualifications of the staff to be responsible for the
inspection and a proposed schedule of inspections; and
(iii) A description of the arrangements made for the operation of
rail service over the property including copies of the proposed
operating agreements, leases or other compensation agreements under
which service is to be provided, and the proposed method of financing
the operation of such rail service;
(3) In addition to meeting the requirements of paragraphs (b), (c),
(d), and (h)(1) of this section, each application for a project eligible
under Sec. 266.7 (b)(1) or (2)(i) (if the Commission has not made a
finding granting the application for abandonment discontinuance) shall
include an assurance by the common carrier which operates service on or
owns the line related to the project that if an application for a
certificate of abandonment or discontinuance has been filed with the
Commission the application will be withdrawn within a reasonable period
following execution of a grant agreement and before Federal funds are
disbursed for the project; and
(4) When rail facility construction assistance is requested an
assurance by the chief executive officer of the applicant that if the
facility is abandoned, sold, or converted to non-rail freight use during
its useful life, FRA will be compensated an amount computed by applying
FRA's participation in the cost of constructing the facility to the fair
market value of the facility at the time it is abandoned, sold, or
converted to non-rail use.
(i) Substitute service assistance. In addition to meeting the
requirements of paragraphs (b), (c), and (d) of this section, each
application for substitute service assistance shall include:
(1) A detailed description of the substitute service project,
including evidence that the cost and scope of the project are limited to
that necessary to replace the rail service being discontinued;
(2) Evidence that the anticipated benefits and costs of the proposed
acquistion have been analyzed in accordance with the methodology
established by the State under Sec. 266.15(c)(5) of this part;
(3) For construction or improvement of fixed facilities, a
description of the proposed work, including:
(i) The cost and timing of the work; and
(ii) An assurance by the chief executive officer of the applicant
that the Federal share of the project will be repaid in accordance with
Attachment N of OMB Circular A-102, if the properties are not used for
rail freight service during the useful life of the project properties;
(4) For relocation costs, the following assurances by the chief
executive officer of the applicant:
(i) When the rail line related to the project is eligible under
section 5(k)(4)(A) of the Act (49 U.S.C. 1654(k)(4)(A)), an assurance
that the applicant is requesting only such assistance as is needed to
relocate the shippers which were receiving rail service on the line at
the time the Commission found that the public convenience and necessity
would permit discontinuance or abandonment of the rail service;
(ii) When the rail line related to the project is eligible under
section 5(k)(4)(B) of the Act (49 U.S.C. 1654(k)(4)(B)), an assurance
that assistance is being requested to relocate only the shippers who
received rail service on the line as of April 1, 1976; and
[[Page 739]]
(iii) An assurance, and the basis therefor, that the shippers will
not be relocated to a line with respect to which an application for a
certificate of abandonment or discontinuance has been filed with the
Commission or that if an application has been filed it will be withdrawn
within a reasonable period following execution of a grant agreement and
before Federal funds are disbursed for the project;
(5) An assurance by the chief executive officer of the applicant
that after completion of the substitute service project, additional
Federal assistance will not be requested for the continuation of the
rail freight service that the substitute service is designed to replace,
unless the Administrator determines that circumstances have changed so
that continuation of rail freight service is more cost-effective than
continued use of the substitute service project;
(6) A description of the arrangements made for operation of service
where rail service is to be provided in conjunction with a substitute
service project, including copies of proposed operating agreements,
leases, or other compensation agreements under which service is to be
provided; and
(7) An assurance by the chief executive officer of the applicant
that assistance provided will not be used to pay the non-Federal share
under any Federal program.
(j) Execution and filing of applications. (1) Each original
application shall bear the date of execution and be signed by the chief
executive officer of the agency submitting the application;
(2) Each application for planning assistance, and two (2) copies
thereof, shall be filed with the Administrator through the appropriate
Federal Highway Administration Division Office;
(3) Each application (excluding requests for planning assistance),
and two (2) copies thereof, shall be filed with the Administrator
through the appropriate Regional Director of Federal Assistance. A
current list of the appropriate mailing addresses of the above officials
will be provided by FRA to each State.
Sec. 266.19 Environmental impact.
(a) General. The Administrator has determined that providing
assistance to cover the following costs is not a major action
significantly affecting the quality of the human environment:
Rehabilitation or improvement consisting of work normally performed on a
periodic basis which does not change the existing character of the
facility (including work to overcome normal periodic maintenance that
had been deferred) rail service continuation, acquisition, and planning.
(b) Substitute service assistance, rail facility construction
assistance, and non-exempt rehabilitation or improvement assistance--(1)
Environmental assessment. (i) When an applicant requests substitute
service assistance, rail facility construction assistance, or
rehabilitation or improvement assistance (except for rehabilitation or
improvement assistance which is exempt under paragraph (a) of this
section), the applicant shall:
(A) Prepare an environmental assessment to determine whether the
future use of the property will significantly affect the quality of the
human environment; or
(B) Provide sufficient documentation to enable the Administrator to
determine that the project satisfies the following criteria:
(1) The action is not likely to be environmentally controversial
from the point of view of people living within the environment affected
by the action or controversial with respect to the availability of
adequate relocation housing;
(2) The action is not inconsistent with any Federal, State, or local
law, regulation, ordinance, or judicial or administrative determination
relating to environmental protection;
(3) The action will not have any significant adverse impact in any
natural, cultural, recreational, or scenic environment(s) in which the
action takes place, or on the air or water quality or ambient noise
levels of such environment(s);
(4) The action will not: use 4(f)-protected properties; adversely
affect properties under section 106 of the National Historic
Preservation Act; involve new construction location in a
[[Page 740]]
wetlands area; or affect a base floodplain;
(5) The action will not cause a significant short- or long-term
increase in traffic congestion, or other significant adverse
environmental impact on any mode of transportation;
(6) The action is not an integral part of a program of actions
which, when considered separately, would not be classified as major FRA
actions, but when considered together would be so classified; and
(7) Environmental assessment or documentation is not required by any
Federal law, regulation, guideline, order, or judicial or administrative
determination other than this part.
(ii) Prior to submitting an application, FRA recommends that the
applicant seek the Administrator's advice as to form and substance of
the assessment for the project under consideration. The environmental
assessment shall utilize an interdisciplinary approach in identifying
the type, degree of effect, and probability of occurrence of primary,
secondary and cumulative potential environmental impacts (positive and
negative) of the proposed action and of alternative courses of action.
The depth of coverage shall be consistent with the magnitude of the
project and its expected environmental effects. The environmental
assessment and all documents used as a basis for the assessment shall be
submitted together with the application for assistance.
(2) Environmental impact statement. A draft environmental impact
statement (EIS) shall be submitted with each application when the
environmental assessment concludes that the future use significantly
affects the quality of human environment. FRA recommends that prior to
submitting the application, the applicant seek the Administrator's
advice as to form and substance of the EIS for the project under
consideration.
(3) Finding of no significant impact. A draft finding of no
significant impact declaration shall be submitted with each application
when the applicant's environmental assessment concludes that the figure
use does not significantly affect the quality of the human environment.
The finding of no significant impact shall include a description of the
project, and sufficient data and environmental findings to support the
conclusions as to the impact upon the quality of the human environment.
FRA recommends that prior to submitting the application, the applicant
seek the Administrator's advice as to the form and substance of this
finding for the project under consideration.
(4) Section 4(f) determination. For projects involving the use of
any land from a public park, recreation area, wildlife and waterfowl
refuge, or historic site of national, State or local significance as
determined by the Federal, State, or local officials having jurisdiction
thereon, information to support a determination pursuant to section 4(f)
of the Act shall be submitted together with the application. The section
4(f) determination shall document that:
(i) There is no feasible and prudent alternative to the use of such
land; and
(ii) The project includes all planning to minimize harm resulting
from such use.
(5) Historic preservation. For projects involving the use of
historic, cultural or archeological resources listed or eligible for
listing in the National Register of Historic Places, information which
documents that the Advisory Council on Historic Preservation has been
afforded an opportunity for review and comment on the proposed project
in accordance with 16 U.S.C. 470 and 36 CFR part 800 shall be submitted
with the application.
(c) Highway or highway-related facilities. Substitute service
projects involving highway or highway-related facilities are subject to
the applicable substantive Federal Highway Administration regulations on
environmental considerations (23 CFR part 771).
Sec. 266.21 Grant agreement and disbursement.
(a) Grant agreement. (1) Upon the approval of an application meeting
the requirements of Sec. 266.17 of this part, a grant agreement for the
Federal share of the approved amount of estimated program costs will be
executed by the Administrator and the grantee.
(2) The grant agreement will identify the amount of the grantee's
share of
[[Page 741]]
program costs to be furnished in cash and through approved in-kind
benefits. The grantee shall expend a pro-rata share of its cash
contribution at the same time payments of the Federal share are made
available to the grantee.
(b) Disbursement. (1) Federal funds are provided either in advance
by a letter-of-credit or a Treasury check or by reimbursement in
accordance with Attachment J of OMB Circular A-102.
(2) Prior to receipt of advance payments, the grantee must have
demonstrated to the satisfaction of the Administrator that it has
established procedures to comply with OMB Circular A-102, Attachment J,
including procedures that will minimize the time elapsing between the
receipt of funds by the grantee and their disbursement. Evidence of such
compliance shall be provided to the Administrator at least 30 days prior
to the anticipated date of receipt of advance payments. An advance by
letter-of-credit is used when the rail service assistance is expected to
be provided for a minimum of one (1) year, and is expected to involve
annual payments aggregating at least $120,000. Otherwise, advance
payments are made by Treasury check.
(3) If the grantee is not eligible for advance payments or does not
desire them, the grantee will be reimbursed for eligible expenditures at
the end of each fiscal quarter upon submission of a request for
reimbursement.
(4) Before disbursement of Federal funds can be made to a grantee
for payment to third parties under this subsection, the grantee must
have executed an agreement with the third party.
(5) Acquisition assistance will be disbursed only after the
following have been approved by the Administrator:
(i) A title opinion of the chief legal officer of the grantee that
describe the type of title being acquired, and if a general warranty
deed is not being given, it must explain why it could not be given. The
opinion shall also advise of any need for use of the State's eminent
domain powers to assure adequate title. In addition, the opinion shall
explain how the defects disclosed by the title search might affect the
marketability of the property;
(ii) A written determination that the property acquired is limited
to the land and facilities that are needed for the rail freight services
which would have been curtailed or abandoned but for the acquistion has
been accepted by the Administrator; and
(iii) A written determination that the purchase price is consistent
with the value of the property interest being acquired, and the evidence
upon which the determination is based.
(c) Settlement. (1) Settlement under the grant agreement is made on
the basis of a Federal audit which has determined the allowable costs
over the entire term of the grant agreement. If the Federal audit
determines that the allowable costs under the grant agreement are less
than the amount of the grant, the difference shall be refunded to FRA at
the end of the fiscal year in which the audit was made unless it has
become the subject of another executed grant agreement. Upon termination
of a State's participation in the Rail Service Assistance Program, the
State shall repay FRA the Federal share of any unused rehabilitation and
improvement assistance and any accumulated interest.
Sec. 266.23 Record, audit, and examination.
(a) Retention and custodial requirements for financial records,
supporting documents, statistical records, and all other records
pertinent to a grant provided under this part shall be governed by
Attachment C of OMB Circular A-102.
(b) The Administrator and the Comptroller General of the United
States or any of their duly authorized representatives shall, until the
expiration of three years after submission to the Administrator of the
grantee's final accounting of all program funds, and for any longer
period necessary to resolve audit findings, have access for the purpose
of audit and examination to any books, documents, papers, and records
which in the opinion of the Administrator or the Comptroller General of
the United States may be related or pertinent to the grants, contracts,
or other arrangements arising out of, or in any way connected with, the
rail service assistance program.
[[Page 742]]
Sec. 266.25 Waivers and modifications.
The Administrator may, with respect to individual requests, upon
good cause shown, waive or modify any requirement of this part not
required by law or make any additional requirements the Administrator
deems necessary. Procedures for submission and consideration of
petitions for waiver or modification are governed by 49 CFR part 211.